Affordable housing in Chennai means a unit costing between ₹ 8 and 20 lakh (₹8-10.2 lakh for EWS and ₹16-20 lakh for LIG households), based on the Deepak Parekh Committee’s definition of affordability. In practice, however, state agencies as well as private builders define affordable housing by size, referring to units of 300 to 600 square feet. This approach has contributed to making most “affordable” housing produced in the city unaffordable to EWS and LIG households.
This note outlines the dynamics and determinants of affordable housing in the Chennai Metropolitan Area, drawing on data from a five-year period (2013-2018). It estimates Chennai’s housing shortage and affordability line, outlines the role of state and private players in supplying affordable housing, and discusses builders’ responses to state incentives aimed at increasing their supply of such housing. It ends with some comments on the post-pandemic market for affordable housing.